Analysts at Jefferies Equity Research anticipate that Apple Inc. (NASDAQ:AAPL) financial results for the first quarter of the current fiscal year will be below the consensus estimates, and project substantial downside for the second quarter.

Jefferies analyst Peter Misek together with Jason North and Billy Kim estimated that Apple Inc. (NASDAQ:APPL) would report $41 billion revenue and $9.52 earnings per share compared with the consensus estimate of Wall Street analysts at $43 billion revenue and $10.11 earnings per share for the first quarter.

The analysts estimated that the tech giant shipped approximately 34 million units of iPhone units and 18 million units of iPad units. Misek and his colleagues projected that Apple’s gross margin will be 37.6 percent due to continued margin headwinds and the mix shift away from iPhones.

For the second quarter, the research firm expects Apple Inc. (NASDAQ:AAPL) financial performance will still be below consensus estimates. The analysts projected that the company will report $35 billion in revenue and $7.22 earnings per share with 37.1 percent gross margin vs. $39.3 billion revenue and $9.23 earnings per share with 38.4 percent gross margin (Street consensus). During the second quarter, they estimated that Apple Inc. (NASDAQ:AAPL) will ship 26 million iPhones and 20 million iPads.

According to Misek and his fellow analysts, based on their trip to Asia, the iPhone 5S is experiencing pre-production issues. They projected that mass production of the device could be months away, which means that the product launches of the company would be delayed.

The analysts believe that the launching of the low-cost iPhone might be delayed until the fourth quarter, which will cause materials risks for Apple Inc. (NASDAQ:AAPL) in the third quarter for its 50 million total iPhone build plan. According to them, the introduction of a refreshed iPad mini is unlikely in the second quarter. If it occurs, they think the volume would be limited because of yield issues on the new on-cell retina screen technology.

The analysts anticipate an iPad 5 refresh in the second quarter with low volumes. According to them, they did not see any evidence of iWatch production, no chance for an iPhone 6 launch in the third quarter due to supply chain issues. The launching of iTV is also unlikely this year because Apple Inc. (NASDAQ:AAPL) wants 4K screen with $2,500 ASP.